The GOP Deserves Credit for Stabilizing Deficits, But Plight of Unemployed Ignored

In his confrontational press conference yesterday, President Obama claimed that if Congress eventually turns on the “sequester”—the $1.2 trillion in across-the-board spending cuts that lawmakers delayed in the fiscal cliff deal—he will have come close to his stated goal of shaving off $4 trillion in deficits over 10 years. As the Huffington Post’s Jon Ward notes, Obama’s budget calculation derives in part from that of the liberal Center for Budget and Policy Priorities, cited by Paul Krugman and other critics of deficit alarmism.

One thing neither Obama nor Krugman mention is that a good chunk of this deficit reduction—the 2011 Budget Control Act—would not have materialized if not for House Republicans dragging Obama into the first debt-ceiling crisis.

Republicans, in other words, deserve at least half the credit for getting our fiscal situation close to the point where Obama and liberal budget wonks may breathe a sigh of relief.

A couple points, before everyone high-fives each other and calls off the debt-ceiling dogs:

Discretionary spending is the low-hanging fruit of deficit reduction. Discretionary spending programs are so called because Congress has control over their budgets—unlike mandatory programs like Medicare, Social Security, and Medicaid, whose outlays increase on virtual autopilot. Jared Bernstein, who has prodded his fellow liberals to put entitlements on the table, notes that Congress already has enacted 70 percent of the nondefense discretionary cuts called for in the Bowles-Simpson plan. Recall that these are the programs (education, basic research, infrastructure investment) that Obama really likes. The reason he has floated his willingness to accept modest entitlement reforms (raising the eligibility age of Medicare, chained CPI for Social Security), to the consternation of the Democratic base, is that he knows that programs that benefit the elderly are going to crowd out spending that he believes will “Win the Future.”

The unemployed recede further into the shadows. If we’re being charitable, we see that both parties at least notionally are interested in closing the “output gap”—wherein economic growth can’t keep pace with population growth—which is the primary reason we’re running such high annual deficits. Obama believes a proactive federal government can spur more technological breakthroughs like the internet and GPS. Republicans believe that reforming the tax code and shrinking government will do the trick. Whichever story you’re inclined to believe, you know we can’t close the gap overnight. Meanwhile, the unemployment crisis grinds on—especially severe as it is for middle-aged workers who are supposed to be in the prime of their careers and whose financial responsibilities are significantly more daunting than those of the unemployed young.

Faced with human suffering in the immediate term and the long-term crisis posed by an aging population, our political elites are paralyzed. They target marginal programs that deficit scolds don’t worry much about, and wait for the other side to take the plunge on entitlements. The jobless remain jobless. Growth remains sluggish. And the population keeps getting grayer.

The Republicans that supported tax breaks slanted toward the wealthy while fighting two wars? Resulted in increasing income gap, but not creating jobs.

Or the Republicans that pushed the unfunded Medicare Part D, which was a give away to drug companies because it does not allow negotiating drug cost. The VA pays 40%-60% less for drugs. A few years ago when the House was under Democrat control, a bill was passed to allow negotiating drug prices. No surprise, it died in the Senate.

How about the farm programs that make automatic payments to mostly corporate farmers and about 25 current members of Congress (large majority are Republicans)

How come the Republicans only talk about Medicare, Medicaid (most money to elderly in nursing homes), and social security.

The General Accounting Office (GAO) produces a lengthy report over a year ago with a list of potential cuts.

There is no evidence that Obama is not interested in cutting the deficit. He has to know it will reflect on his legacy.

What we have seen here is an odd “German style work share” program with a lot of employers without government assistance on it. Lower class (retail and restaurants) continue to have more part time work versus more full time. Obamacare has accelerated this reality but I believe been occurring since 2007ish. (Employers may slightly higher wages for a more flexible workforce.)

Unfortunately, this is the job growth in the Lesser Depression and I think this will have long term impact on families. For one the birth rate continues to drop.

Congress hasn’t agreed on a new Farm Bill. The biggest reason for this is that Republicans want less money for food stamps than the Democrats want. But another reason is that members of Congress in both parties want reforms of farm subsidies but they are coming up agaisnt entrenched interests and their allies in Congress.

I have a great Aunt that’s 100, worth well north of a million dollars, and never worked a day in her life receiving a social security check and medicare benefits. Seems like limiting that type of thing from happening may help the long run entitlement situation.

I personally know many middle-aged unemployed who get no support such as unemployment. They are growing ever more desperate. One popular 55 year old committed suicide out of hopelessness last week in this community. The job retraining stimulus programs only retrained people for other jobs that don’t exist. How dare anyone callously dismiss these desperate people without hope as lazy.

Under the German system part-time workers receive full time wages via the unemployment insurance system.
The ACA (which, remember hasn’t really kicked in yet) is not to blame for this, and the trend you cite, and also the trend toward hiring temps, has been in existence since at least the 90s.